The John Marshall Journal of Information Technology & Privacy The John Marshall Journal of Information Technology & Privacy

Law Law

Volume 8 Issue 2 Computer/Law Journal - Spring 1988 Article 4

Spring 1988

The New Taiwan Copyright Law: Does It Spell Doom for The New Taiwan Copyright Law: Does It Spell Doom for

Counterfeiters?, 8 Computer L.J. 171 (1988) Counterfeiters?, 8 Computer L.J. 171 (1988)

W. Scott Lawler

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NOTES

THE NEW TAIWAN COPYRIGHT LAW:DOES IT SPELL DOOM FOR

COUNTERFEITERS?

I. INTRODUCTION ............................................ 171

II. HISTORY OF THE REPUBLIC OF CHINA'S COPYRIGHTLAW S ........................................................ 172A. EARLY 1900's-THE CIVIL WAR .......................... 172B. POST-CIVIL WAR: THE ROC ON THE ISLAND OF TAIWAN. 175

III. INADEQUACIES OF U.S. REMEDIES ...................... 178A. THE LANHAM AcT ....................................... 178B. THE TARIFF ACT ......................................... 179C. STATE CRIMINAL STATUTES .............................. 179

IV. THE NEW COPYRIGHT LAW ............................... 179A. THE NEW PROVISIONS .................................... 179B. COMPARISON WITH OTHER COPYRIGHT LAWS ............. 181

1. The United States ..................................... 1812. France ................................................ 1823. W est Germany ....................................... 182

V. INADEQUACIES OF THE NEW COPYRIGHT LAW ....... 183VI. CONCLUSION ............................................... 184

I. INTRODUCTION

For many years, Taiwan has been one of the largest product-coun-terfeiting nations in the world. The products copied are virtually end-less. Items such as record albums, Rolex watches, designer jeans,computer software products, and books are all prone to being copiedand then sold at a tremendous profit.' In 1982, 56% of the counterfeitedgoods confiscated by United States Customs Agency were from Tai-

l. These products are often sold at a fraction of their normal price. The author,while in Taiwan, was able to purchase record albums by top recording stars for less thanU.S. $1.00 each.

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wan.2 In 1984, the figure rose to 62%.3 The United States, being thelargest producer of goods, is the nation most affected by this practice.The world-wide economic market for U.S. producers shrinks as a resultof Chinese nationalists that are copying products manufactured in theU.S. These copies are distributed in Taiwan, throughout the Orient, theUnited States, and many other nations and take away the copyrightholder's opportunity in those markets. The loss of control over a copy-righted product results in lost revenue to the creator and lost taxes tothe government. Consequently, the U.S. has attempted, for many years,to pressure the Republic of China into passing a copyright law that:1) adequately protects the products of U.S. citizens and corporations,and 2) provides for more strict enforcement of existing copyright laws.4

As a practical matter these efforts have failed. On July 10, 1985, how-ever, the Legislative Yuan (the Legislative Body of the Republic ofChina) passed a new Copyright Law. The Chinese claim that this newlaw has resulted in a drop in the amount of counterfeited goods confis-cated by the U.S. Customs (from Taiwan) from $13 million in 1984, to $8million in 1985.5 It is unclear, however, whether this progress isadequate.

6

This Note analyzes the Republic of China's past efforts to develop acopyright law that is satisfactory to the United States and the ROC'sown sense of justice. Parts II and III of this Note delineate the insuf-ficiencies of the past laws. Parts IV and V of this Note further analyzethe New Copyright Law and discuss whether or not it corrects the inad-equacies of the past laws. Finally, this Note suggests further remediesfor this costly counterfeiting practice that the new law does not afford.

II. HISTORY OF THE REPUBLIC OF CHINA'SCOPYRIGHT LAWS

A. EARLY 1900's-THE CIVIL WAR

The Chinese government's first effort to effectuate a copyright lawwas through a 1903 treaty with the United States.7 The treaty read:

Therefore the Government of China ... agrees to give full protection,

2. Skretney, Fighting a Reputation as the 'Counterfeit Capital' of Asia, L.A. DailyJournal, May 16, 1986, at 3, col. 3.

3. Id.4. The U.S. has recently threatened to withdraw low tariff privileges from Taiwan

and to block aid to that country from the World Band and International Monetary Fund.See id.

5. Skretney, supra note 2.6. There is also the question of whether this was an accurate report of U.S. Customs'

data. This question is dealt with later in this Note.7. Huang, The Protection of American Copyrights under Nationalist Chinese Law,

12 HARV. INT'L L. J., at 71, 72 (1971).

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in the same way and manner and subject to the same conditions uponwhich it agrees to protect trademarks, to all citizens of the UnitedStates who are authors, designers, or proprietors of any book... espe-cially prepared for the use and education of the Chinese people, ortranslation into Chinese of any book... in the Empire of China duringten years from the date of registration. With the exceptions of... books .... no work shall be entitled to copyright privileges underthis article. It is understood that Chinese subjects shall be at liberty tomake, print and sell original translations into Chinese of any workswritten ... by a citizen of the United States .... 8

It seems that China's reason for granting only a very limited copy-right law was that the country wanted access to Western knowledge. 9

The country's poverty prohibited its acquisition of foreign copyrights.The above provision allowed Chinese Nationals to copy anything thatwas not "especially prepared for" the Chinese and also gave them aright to translate foreign literary works.' 0 This provision effectivelygave the Chinese the right to copy another's work.

First, only books were protected. Artistic works or other literaryitems were not included. Second, only those books that were preparedfor the exclusive use of the Chinese could be protected. The category ofprotected works was, therefore, greatly narrowed. Third, even booksthat fell into this narrow category of protection were not exemptedfrom translations. Finally, copyright protection was given only to booksafter registration and then for only 10 years.

This treaty clearly granted more protection for the Chinese thanfor U.S. business interests. Unless an author of a book could prove anexclusive purpose of designing the item for the Chinese, no protectionwas given. China essentially codified a right they had advocated for along period of time-translation of foreign works. With the exceptionof a few books the treaty displayed a permissive attitude in acquiringWestern knowledge by any means. Some authorities justified the treatyas a means of serving some sort of U.S. missionary interest in China."'In 1912, the Republic came into power and overthrew the Ching dy-nasty. With the coming of the Republic, there was hope that a new re-spect for copyrights would also emerge. However, the New CopyrightLaw that was passed in 1915 was essentially a duplicate of the previouslaw.'

2

8. Treaty between the United States and China for the Extension of the CommercialRelations between them, Oct. 8, 1903, United States-Republic of China, 33 Stat. 2208 partII, T.S. No. 430, Art. XI (emphasis added).

9. Huang, supra note 7, at 74.10. Id at 74.11. Id. at 73-74 n.10.12. 2 S. LADAS, THE INTERNATIONAL PROTECTION OF LITERARY AND ARTISTIC PROP-

ERTY 993 (1938).

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In 1928, the Nationalist Government became the legal power ofChina (the R.O.C.). In May, 1928, a revised copyright law was promul-gated.1 3 Some of the problems for Americans seeking copyright protec-tion, however, were left unresolved. Article 14 of the Regulations forEnforcement stated that:

Foreigners who produce works useful to the Chinese may apply for re-gistration under this law. The foregoing provision, however, is limitedto those foreigners whose countries accord reciprocal copyright privi-leges to Chinese citizens. The period of copyright on works referred toin Clause 1 of this Article is limited to ten years.14

This revised law was a step in the right direction, but still left someloop-holes that many counterfeiters were able to jump through. Thelaw only afforded protection for ten years to foreigners, compared to aterm of the author's lifetime, plus an additional 30 years, given Chinesenationals. 15 In the U.S., copyrights were given for 28 years, with a pos-sibility of renewal for an additional 28 years. Also, the product in theR.O.C. was protected only after being granted a copyright, requiring re-gistration with the Ministry of the Interior.

The result was effectively a "Catch-22" situation. Corporationswere not protected unless they registered the product. Registration,however, did not assure U.S. corporations of adequate protection. Cor-porations were unwilling to expend the time and money to registertheir works.16 Registration was also limited by the prohibition of copy-rights to products that are not "useful" to the Chinese.17 While thismay be a broader requirement than that of "especially prepared for theuse of the Chinese"'8 , it still was a subjective, self-serving provision.The net effects provided no additional protection for U.S. authors.However, Article 10 of the law stated that, "[t]ranslations of literaryworks may be copyrighted .... but this shall not exclude others frommaking original translations provided there is a wide difference in thetranslations."' 9 Although the literal meaning would cover only thetranslation itself and not the right to translate, it was later determinedthat the Chinese did not recognize the right of translation to run with

13. Detailed Regulations for the Enforcement of the Copyright Law, 4 CHINA L. REV.7 (1929) (N. Allman trans.).

14. Id15. Huang, supra note 7, at 77.

16. Skrentny, supra note 2.17. Detailed Regulations for the Enforcement of the Copyright Law, supra note 13, at

8, art. 14.

18. Treaty, supra note 8.19. Detailed Regulations for the Enforcement of the Copyright Law, supra note 13, at

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the copyright.20 The clear meaning of the Article allowed Chinese na-tionals to gain a copyright (through the translation of a literary work),but still allowed competition among the Nationals by granting a copy-right for a different translation. Some claim that the Chinese, inher-ently, do not have the concept of copyright. However, when this type oflaw is reviewed, it is unclear whether the government (or perhaps thepeople themselves) intentionally prohibited the concept from ever de-veloping in their country and culture.

In 1946, the Republic of China and the United States entered into aTreaty of Friendship, Commerce and Navigation.21 The treaty again at-tempted to address the problem of piracy in China. Article IX of thetreaty afforded protection (provided rules of registration were compliedwith) to literary and artistic works, including inventions, trademarksand trade names, rather than just books, maps and prints.22 The prob-lem with translations, however, still existed due to the Protocol in thetreaty that did not require the Republic of China to protect transla-tions. 23 The fact that the new law failed to protect items of a non-liter-ary nature is possibly what led to the explosion of pirating the followingyears.

B. POST-CIVIL WAR: THE ROC ON THE ISLAND OF TAIwAN

After the Civil War of 1949, and the Nationalist Government (ledby Chiang Kai-Shek) relocation to Taipei, Taiwan, those who practicedpiracy continued to do so in Taiwan. The practice, with virtually no ex-penses in research, design, market testing, etc., was and is very profita-ble. Added to this was Taiwan's low cost of labor, which allowed for amass production of counterfeited goods. The American governmenttried to put extreme pressure on the Republic of China officials to curbthe activity.24 This pressure, while leading to some official governmen-tal action, did not affect the unauthorized copying of works. In fact, thepractice dramatically increased.

The Republic of China did outlaw the export of pirated works. Itwas not, however, able to take a strong enough stand to finally suppressthe activity. Part of the problem probably was that allowing the activityto continue was in the nation's best interest. The act of counterfeitingcreates more commerce, jobs and taxes.

20. Study of Comparative Copyright Law, 2 UNESCO Copyright Bull. No. 2-3, at 24(1949).

21. Treaty of Friendship, Commerce, and Navigation, November 4, 1946, UnitedStates-Republic of China, 63 Stat. 1299, T.I.A.S. No. 1871.

22. Id., art. IX, 63 Stat. 1308-1309, T.I.A.S. No. 1871, at 770.23. Yambrusic, The Status of U.S. Copyright Relations with Taiwan, 13 INT'L J.

LEGAL INFO., Feb.-Apr. 1985, 1.24. Huang, supra note 7, at 82.

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The problem was again addressed in the 1964 revision of the copy-right law.25 The law did provide protection for foreign works, (ratherthan only works by foreigners that were useful to the Chinese) but ex-plicitly withheld the right of translation from the foreign authors.26

This revision may be seen as hollow; it did not allow standing to firmsnot registered in Taiwan. Only people/businesses that qualified as "ju-ristic persons" were able to initiate private prosecutions. Unregisteredbusinesses did not qualify.27 There had been no other changes in thecopyright law until the summer of 1985.

As the law stood from 1964 to 1985, there were a few significantgaps, allowing pirates to make a very profitable return on a wide rangeof products without risk of penalty. The copyright law protected onlylimited types of works - items that seemed to have some literary orartistic value. A copyright holder in China, however, did not possessthe right of translation. This exploited an author's work because mostliterary items of foreign origin had little value to the Chinese untiltranslated. Counterfeiters were not only taking the market in Taiwanfor an author's works, but they also took any other market in the worldfor the item. Therefore, due to the lack of a sufficziently stringent copy-right law, counterfeiters had endless opportunities in reproducing vari-ous items very profitably. Another problem that faced U.S.corporations and authors was that as producers of unregistered prod-ucts, they had no standing in Taiwanese courts to civilly protect theircreations. According to the Judicial Yuan (the governing body of courtsin Taiwan), only "juristic persons" were allowed to be privateprosecutors.

2

Possibly the greatest cause for the tremendous amount of copyrightinfringement in Taiwan has been the lack of significant penalties in-flicted upon counterfeiters. Without the fear of facing payment ofheavy fines or the prospect of incarceration, pirates in Taiwan are notdeterred from illegally making and selling copies of protected works.The penalties that could be imposed, prior to the new law being passedin 1985, were limited to one year imprisonment and a fine of not morethan 1,000 NT (New Taiwanese dollars).29 In addition, a pirate that imi-tated a copyright and one that printed or sold the copies were subject to

25. Id., n. 44.26. Id.27. Note, Protection from Commercial Counterfeiting in Taiwan for U.S. Firms, 16

L. & POL. INT'L Bus., 641, 655 (1984).28. This, however, was somewhat resolved by the Judicial Yuan of the government

prior to the amendment to the Copyright Law. In response to inconsistent holdings intwo cases involving U.S. Corporations seeking to bring a private prosecution, the Judicial

Yuan, in 1983, held that U.S. companies should be given juristic status. Note, ProtectingIntellectual Property in Taiwan, 60 WASH. L. REV., 117 (1974).

29. 1,000 NT roughly equals $30 U.S. dollars. Wall St. J., Nov. 21, 1986, at 50, col. 5.

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the same penalties. 30

The result of Taiwan's ineffective copyright law is felt by manyU.S. industries. Taiwan has become the "international haven for trade-mark counterfeiters and copyright pirates."' l Examples of the productsand the industries affected by such piracy include Levi pants, Crosspens, Rolex watches, Johnny Walker scotch whiskey, Gucci handbags,Samsonite luggage, Pierre Cardin fashion clothes, books, recordings,drugs, electrical components, automobile parts, and computers. 32 Aspreviously noted,3 3 counterfeiting leads to the loss of market opportuni-ties in Taiwan for copyright holders. Market opportunities across theworld, however, are also unjustly taken away as pirates export their il-legal copies. An example of this can be found in the Apple Computercase. The Apple II computer had been counterfeited many times notonly in Taiwan, but also throughout all of Southeast Asia.34 Apple, Inc.,initially decided to sacrifice the market in Taiwan, Hong Kong and therest of Southeast Asia. This action, however, resulted in the exportfrom Taiwan (and other countries) into established Apple markets inAustralia, South Africa, South America and California.35 The prospectof losing these established markets prompted Apple to initiate legal ac-tion in Taiwan and Hong Kong.36 As a response to this type of infringe-ment, Commerce Secretary Malcolm Baldridge has stated thatcounterfeiting costs the U.S. economy almost $20 billion per year. Thenumber of lost jobs, the Secretary estimates, ranges from 130,000 to750,000.

37

Another counterfeiting concern arises from the comparison of origi-nal items to their copies. The copies are generally of inferior qualitywhen compared with the original item.38 This seems to have two possi-ble effects. First, the consumer of the item (whether the consumer is inTaiwan or another part of the world) may often purchase an item be-lieving it is an original. Since the purchased item's quality is inferior,the low cost possibly reflects a fair price for the item. Thus the pur-chaser could not claim to have overpaid for the product. The problem,however, is meaningful when the product is valued for its technological

30. Shapiro, Strengthening of Trademark, Copyright Laws Proposed, E. ASIAN ExECu-TIVE REP. April 1982, at 17-18.

31. Id., at 17.32. Note, supra note 27, at 641, 642.33. See supra notes 2-3 and accompanying text.34. Asia's 'Microchip Pirates', WORLD PRESS REV., July 1983 at 52.35. Note, supra note 28.36. Parks, High Tech Pirates Sell Look Alikes, Los Angeles Times, Oct. 13, 1982, at 1,

col. 1.37. Skrentny, supra note 2, at 14, col. 3.38. It is unclear whether Taiwan's lack of technology or the counterfeiters' greed for

greater profits cause cheaper components to be used in the end product.

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usefulness. A copied item that does not match its original in quality canbe worthless to the consumer, if the item will not serve the desired pur-pose. This is great economic waste to customers anywhere.

Second, many items that do not meet high standards of quality maycause physical harm to the user/consumer.3 9 Since a counterfeiter notonly copies the product in appearance, but also copies the trademark,the consumer will be led to believe that he is purchasing the originalproduct. This combination gives consumers no indication that the itemdoes not possess the safety standards of the original.

It can therefore be concluded that lack of copyright protection re-sults in losses to not only the product creator but also to consumers inlost money and potential physical harm. To resolve these inequities theRepublic of China should promulgate a law that eliminates the counter-feiter's motivation to steal others' products. Without a law that pro-duces fear and unrest in the minds of these counterfeiters, theunauthorized reproduction of goods in Taiwan will continue to harmproducers and consumers.

III. INADEQUACIES OF U.S. REMEDIES

The fact that the counterfeiters in Taiwan export their goods intothe U.S. is evidence of the inadequacy of U.S. copyright infringementlaws. To better understand this phenomenon, a brief synopsis of the ac-tions available in the U.S. is provided, along with an explanation oftheir shortcomings.

A. THE LANHAM ACT

Under the Lanham Act, a copyright holder who proves that a coun-terfeiter has violated its copyright, may be entitled to injunctions,40 de-struction of equipment used in the illegal reproductions, 4' trebledamages, defendants profits from the counterfeited items, and occasion-ally attorneys fees. 42 These remedies, however, have not controlled thegrowth of counterfeited goods brought into this country.43 One problemwith the Act is that it does not provide criminal sanctions, and judgesrarely invoke the most severe (but discretionary) civil remedies.44

Moreover, the Lanham Act places the cost and burden of bringing thecase to trial on the complaining party. This burden exceeds the abilities

39. Note, supra note 27, at 641-2.40. 15 U.S.C. § 1114 (1982).41. 15 U.S.C. § 1118 (1982).42. 15 U.S.C. § 1117 (1982).43. Rakoff and Wolff, Commercial Counterfeiting and the Proposed Trademark

Counterfeiting Act, 20 A. CRIM. L. REV. 145, 163.44. Note, supra note 27, at 646.

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of small and medium size companies to thwart counterfeiters. 45 In addi-tion, it is unlikely that professional counterfeiters would honor a civiljudgment or that such judgment could be enforced. The Lanham Actalso places on the plaintiff the burden of proving his damages. Thisusually necessitates showing lost sales, which means the plaintiff mustrely on the defendant's business records. The defendant can easily de-stroy these records. 46

B. THE TARF ACT

The Tariff Act of 193047 was amended in 1978 to suppress the in-flow of counterfeited goods by requiring that U.S. Customs officialsseize counterfeited goods.48 These provisions, however, affect importa-tion of illegal goods only modestly. Counterfeiters use very sophisti-cated means to avoid detection.49

C. STATE CRIMINAL STATUTES

There are many state statutes that criminalize the counterfeiting ofgoods. But the crime under most statutes is only a misdemeanor andthe penalty under these statutes is only a prison term of a fewmonths.5° Such penalties will have little or no deterrent effect, as thecounterfeiter faces a relatively insignificant punishment.

The U.S. correctly contends that the ROC has not provided for ade-quate copyright laws that will curb the tide of counterfeited goods intothis country.5 1 The U.S., however, has not adequately legislated thisproblem at home in order to provide as much protection as it can unilat-erally. Therefore, the problem is more than just the ROC's blatant in-fringement of U.S. citizen's copyrights.

IV. THE NEW COPYRIGHT LAW

A. THE NEW PROVISIONS

On July 10, 1985, the Republic of China signed a New CopyrightLaw. 52 The Copyright Law of 1985 includes some very important provi-

45. Rakoff and Wolff, supra, note 41, at 164.46. Id. at 165.47. 19 U.S.C. § 1526 (1982).48. Id. § 1526(e).49. Note, supra note 27, at 648.50. Rakoff and Wolff, supra note 43, at 169.51. See infra notes 3-4 and accompanying text.52. CHINESE COPYRIGHT LAW OF 1964 (amended in 1985) (note-since locating an Eng-

lish version of the Copyright Law is difficult it is recommended that the reader refer toWang, New Copyright Law; Update on Related Draft Legislation, EAST ASIAN EXECUTIVEREPORTS, Aug. 1985, at 20, col. 2, and Lin and Lo, Taiwan's Copyright Law: New Con-

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sions. First, it grants standing to U.S. corporations even if they are notregistered in Taiwan.5 3 This provision is important because copyrightinfringement is not directed exclusively toward items produced or soldin Taiwan, which would necessitate registration by the producer.Therefore, while there may be other prerequisites to bringing a civilprosecution in the Taiwanese courts, the critical requirement of regis-tration to gain standing is no longer an issue. While the law states thatonly nationals of states that have a reciprocal provision to Chinese na-tionals are allowed to bring a civil suit, this is not a problem for U.S.nationals and corporations although it may be prohibitive to otherstates.

The Copyright Law of 1985 also lengthens the list of protecteditems. The items added to the list include: computer software, soundtracks, films, lectures, musical and artistic performances, dance, sculp-ture, scientific and engineering designs, drawings, models and otherworks of art.54 The law gives lifetime protection to most of the aboveitems.55 While this may not be an exhaustive list of what Americanswould think of as protected works, it does, however, offer more protec-tion to producers than previously offered. As stated above, the develop-ment of copyright law in the R.O.C. has been slow and awkward. Thus,this provision may please many producers as a small step forward forthe R.O.C. and for U.S. business people. Still, the question remains ofhow well the government will enforce these new provisions. Withouteffective enforcement, the counterfeiters in Taiwan will not bedeterred.

The Copyright Law of 1985 now makes leasing of a copyrightedwork the right of the copyright owner, excluding this right from allothers. Furthermore, leasing of pirated works is punishable by a fineand/or imprisonment.5 6

The Copyright Law of 1985 defines "computer programs" in thesame way as the U.S. Copyright Law.57 The Ministry of Interior (here-inafter MOI) has issued a draft detailing the criteria for copyright in-fringement of computer programs. 58 The draft provides that the re-writing of a program requires the author's consent.59 It also states thatthe author has the right of reproduction, public broadcast (including

cepts, Remaining Questions, East Asian Executive Reports, Dec. 1985, at 23 for summariesof the Copyright Law). (hereinafter CHINESE COPYRIGHT LAW)

53. Id, at art. 17.54. Id., at art. 4.55. Id, at art. 5.56. Id., at art. 4.57. I&, at art. 3(17).58. American Institute in Taiwan, Outline of Taiwan's New Copyright Law, March

1986, p. 27.59. Id.

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transmittal through a computer network), editing, leasing and rewrit-ing.60 Also, the ROC has welcomed the American Institute in Taiwanto furnish it with a documentation of the U.S. experience with regard tosoftware protection.6 1

Possibly the most important part of the Copyright Law of 1985 is itsadded penalties for copyright infringement. If an infringed propertyhas a fixed price for each unit, "the damages awarded shall not be lessthan 500 times the fixed price of the infringed property. '62 If no retailprice is set, then a court may use its discretion to determine the amountof damages to be awarded.63 Prison terms have also been extended to amaximum of five years. 4

B. COMPARISON WITH OTHER COPYRIGHT LAWS

The R.O.C. must provide penalties and disincentives that will sub-due the motivation to profit by illegal copying. It is only by dealing onthis level that the R.O.C. will be able to curb the depths of this illegaland costly activity. While it has been previously noted that the R.O.C.might actually benefit from counterfeiting (on the domestic perspec-tive),65 the R.O.C. is now at a stage where it is dependent on interna-tional approval and support to insure its existence. Derecognition bythe U.S. and the disaffirmance of the Defense Treaty of 1952, has leftthe people of Taiwan virtually unprotected from a large and powerfularmy separated by a mere 80 miles of ocean. Therefore, the R.O.C.should have as its primary interest the desire to win the approval ofother states. The New Copyright Law may be seen as such an attempt.The penalties and possibility of incarceration in the Copyright Law of1985 compare favorably with statutory provisions in other countries.

1. The United States

In the United States, an author may recover actual damages, theprofits of the infringer, or statutory damages from $250 to $10,000; or$50,000 if willful infringement can be proven.66 The equipment used toproduce the illegal copies will be destroyed.67 In addition, attorney'sfees and litigation costs are recoverable. 68 A willful infringer can facecriminal prosecution and penalties of one year in jail and a fine of

60. 1& at 28.61. 1& at 47.62. CHINESE COPYRIGHT LAW, supra note 52 at art. 33.63. Id.64. CHINESE COPYRIGHT LAW, supra note 52 at art. 40.65. See supra notes 24-5 and accompanying text.66. Title 17 U.S.C.A. § 504(c) (West Supp. 1977).67. Id. § 503.68. 1&

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$10,000; one year and $25,000 for sound recording violations; and twoyears and $50,000 for recidivism. 69

2. France

In France, a copyright holder can have the receipts and equipmentused in the illegal reproduction confiscated and given to him.7° Thecounterfeiter faces a fine of 36,000 to 1,200,000 francs ($6,000 - $200,000U.S. dollars).71 The punishment is raised to 80,000 to two million francs($13,333 to $333,333 U.S. dollars) and three to twenty-four months in jailwhere the infringer habitually engaged in counterfeiting. If the in-fringer is a recidivist, the penalties are doubled.72

3. West Germany

According to West Germany's 1985 Amended Copyright Statute,73 acopyright holder may sue for injunctive relief and either damages or theprofits of the infringer. 74 The author may also demand delivery or de-struction of the equipment used for the illegal reproduction. 75 Thecriminal penalties are a fine or up to five years imprisonment if the in-fringement was done on a "commercial" basis.7 6

Comparison of these penalties to those of the R.O.C. indicates thatthe R.O.C.'s New Copyright Law provides for penalties much like thoseof the United States and West Germany, but generally does not providefor monetary fines comparable to those imposed under the French laws.A damage award of 500 times the unit price of the infringed items (de-pending on the item) is approximately equivalent to the awards avail-able under the United States copyright laws.77 This is important tocomputer manufacturers. Computer counterfeiters could now facejudgments up to $150,000 for software infringement. 78 The CopyrightLaw of 1985's five year prison term is similar to West Germany's fiveyear sentence for the business-minded infringer.

The Copyright Law of 1985 grants a copyright to Chinese nationalsat the time the intellectual work has been completed, but to foreigners

69. I& § 506(a).

70. French C. Pen.71. I& art. 425 at 142.72. Id. art. 427.73. West German Copyright Statute of 1985.74. Id. at art. 97(1).75. Id. at art. 97(2).76. Id at art. 108(a)(1).77. CHINESE COPYRIGHT LAW supra note 52, at ART. 33 with 17 U.S.C.A. § 504(c)

(West Supp. 1977).78. It has been the author's experience that typical software programs cost between

$250-$300.

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only upon registration. 79 The provision, as it stands, causes someproblems for U.S. producers; registration is allowed only if the first pub-lication is done in Taiwan or if Chinese nationals enjoy a reciprocal ben-efit in the other country.8 0 Not long after the law became effective, theMOI initiated a study of the extent to which Chinese nationals enjoycopyright protection in other countries.8 ' On October 24, 1985, the MOIannounced that U.S. Nationals and corporations will enjoy copyrightprotection without having to fulfill the registration requirement.8 2

Even though this announcement conflicts with the New Law, there maybe a legitimate rational for the exception to the law. The Treaty ofFriendship, Commerce and Navigation of 1946 provides for equal treat-ment concerning copyrights between the two countries. 83 Therefore,since Chinese nationals receive a copyright and protection upon comple-tion (and without registration) the FCN could then be interpreted aswaiving any registration requirement for U.S. copyright holders. It ispossible that the Judicial Yuan will react to this politically motivateddeclaration with disdain. First, such a proclamation by the MOI cannotbe seen as controlling the statute. Second, the above logic implies thatan American could receive copyright protection from the R.O.C. uponcompletion of a work in the U.S., but the copyright holder would be un-able to protect his copyright through litigation in the U.S. until fulfil-ling the registration requirements under U.S. law.84

As noted previously, R.O.C. officials have already claimed that Tai-wan's new anti-counterfeiting campaign has resulted in the reduction ofcounterfeit goods confiscated by U.S. Customs officials.85 This, how-ever,m is not accurate as in 1985 Customs confiscated $7.9 million worthof good coming into this nation from Taiwan. Although this is a reduc-tion of the previous year's amount of $12.9 million, Taiwan still leads allother Asian countries in the amount of counterfeit goods seized in thiscountry.

8 6

V. INADEQUACIES OF THE NEW COPYRIGHT LAW

The Copyright Law of 1985 gives only limited protection to the fol-

79. CHINESE COPYRIGHT LAW, supra note 52, at art. 15 and 17.80. CHINESE COPYRIGHT LAw, supra note 52, at at art 17.81. Lin and Lo, Taiwan's Copyright Law: New Concepts, Remaining Questions, EAST

ASIAN ExEcUTrvE REPORTS, Dec. 1985, at 23.82. Id83. Treaty of Friendship, Commerce and Navigation, Nov. 4, 1946, United States-Re-

public of China, art. IX, 63 Stat. 1300-1308, T.I.A.S. No. 1871.84. Before bringing suit for infringement, the author must have either registered his

work or have delivered to the Copyright Office the deposit, application, and fee requiredfor registration. 17 U.S.C.A. § 411(a) (Law. Co-op. 1978 & Supp. 1987).

85. See Skretney, supra note 2 at 3, col. 3, 15, col. 1.86. Skretney, supra note 2, at 3, col. 3, 15, col. 1.

1988]

COMPUTER/LAW JOURNAL

lowing items: literary writings and translations, motion pictures, pho-nographic records, videotapes, photographs and computer software.These products receive a protection period of 33 years.8 7

One of the critical problems with the Copyright Law of 1985 is thatthe owner of an original work does not retain the right to the transla-tion of the work.8 8 This will result in producers of literary works notreceiving the same protection as other producers. This reflects China'slongstanding policy to bring Western knowledge into their societythrough translation of Western literature and China's belief that it hasa preemptory right to do so. Since the accumulation of knowledgeserves a purely social purpose and is not overt commercial exploitation,the Chinese feel that lack of complete protection for literature is com-pletely justified and causes no harm. Although this viewpoint may havebeen tolerated in the past there is less sympathy today with China's jus-tification for pirating;, translations are now used more for commercialgain than to educate the masses.

VI. CONCLUSION

The New Copyright Law of 1985 is by far the most stringent copy-right law that the R.O.C. has ever passed. It includes protection formore types of works, lengthens the period of protection, addresses theimportant question of computer program protection, imposes stricterpenal sanctions and civil penalties, and grants standing to sue for in-fringement in Taiwanese Courts. The new law indicates an attempt toput the R.O.C. in line with the rest of the world with respect to copy-right protection. However, the rest of the world is not likely to be im-pressed, and the United States in particular will not be satisfied unlessthe R.O.C. enforces the law rigorously and to its potential degree of se-verity. Anything less will probably result in only a modest decrease inthe number of counterfeit goods brought into this country.

Because it is unreasonable to believe that the R.O.C. is the onlyparty responsible for the problem of counterfeited goods in the U.S., theU.S. should provide more effective anti-counterfeiting laws if it hopes toreduce this activity.

W. Scott Lawler

87. CHINESE COPYRIGHT LAW, supra note 52, at art. 12.88. CHINESE COPYRIGHT LAW, supra note 52, at art. 13.

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